Bruce Shelley about the 50 unit limit

Age of Empires: 50 unit cap

Age is a game of empire building.

Unlike combat-only games, military units are not the sole measure of your power. Empire building encompasses more than just combat. It includes resource management, research, and construction. In this regard, Age excels. There is no limit on the number of walls, guard towers, and buildings you can construct. What other game can say that?

Age is a game of pacing and play balance.

A great deal of attention has been paid to careful play-balancing and pacing. The unlimited construction of moving units changes the pacing of the game considerably. The balance between those who wish to build up forever and those who wish to launch early military campaigns has been considered and tuned carefully. Both are important and these two opposing strategies are, in our mind, well-balanced as a result of over 9 months of multi-user play testing.

Age is a game of choices.

You win by building the largest Empire, by using finesse, by choosing your units and technologies appropriately, and by adjusting to the fact that you cannot have everything you would like in a single game.
If you approach the population cap, choosing your best 50 is an interesting decision. Assaulting an enemy town with 50 units or less can be impossible or no problem, depending on the 50 units you possess. 50 infantry attacking a defended wall are probably
several Catapults along would greatly simplify the task. Accomplishing your goals within the cap takes more planning and thought, and we find is more fun. It helps avoid the tank rush phenomenon.

Age is a game of advancement and qualitative improvement.

That's why there are four Ages spanning 12,000 years of time. Players will rarely acquire all of the technologies in the game - it is far too expensive to research them all. Accomplished players focus on fully upgrading their key combat units, rather than building large quantities of lower quality forces. This is, generally, a more effective strategy and this is also where Iron Age "Super Units" come into play. These special upgrades cost 20 - 40 times the cost of training a single unit.
While the quantity of units is limited, qualitative increases are virtually unlimited.

Age is not a slugfest.

You do not win by overwhelming your opponents with an unlimited number of units. The best Age players have learned to use their large, but finite numbers effectively. As game players, ourselves, we are still enjoying discovering new strategies after playing Age for over a year. Furthermore, the unit cap creates a very cooperative multiplayer game when team members specialize their civilizations.

Age is a game of high performance.

It is actually the performance cap and not the unit cap that is the true ceiling to the number of units that can be deployed in a RTS game.
The developers have spent over 18 months optimizing the performance of Age to the highest possible level. We have pushed the envelop in order to squeeze every possible CPU cycle out of the processor so your game won't bog down. We feel this is of paramount importance and placing a limit on the number of movable units insures that everyone who plays the game will have an excellent experience.
From a performance perspective, we welcome you to compare Age to other RTS games. Run a multiplayer game with 1,000 or more objects and see for yourself...if you can find another game that allows you to deploy this many.
I believe you will discover that Age actually enables you to deploy
more, not fewer, units than the other RTS games.